# Installment Loan

*Borrowing & Credit — Finicade finance glossary*

An installment loan is borrowed once and repaid in fixed payments over a set term — mortgages, car loans, student loans, personal loans. The payment is level but its composition shifts: early payments are mostly interest, later ones mostly principal. Because the balance can only fall, installment debt is treated more kindly by credit scoring than revolving debt, and converting card balances into an installment loan can lift a score even though total debt is unchanged.

**Also known as:** instalment loan, term loan, amortizing loan

**Related terms:** [Revolving Credit](https://finicade.com/glossary/revolving-credit), [Amortization](https://finicade.com/glossary/amortization), [Personal Loan](https://finicade.com/glossary/personal-loan), [Auto Loan](https://finicade.com/glossary/auto-loan), [Principal](https://finicade.com/glossary/principal)

Source: https://finicade.com/glossary/installment-loan